23 Sep 2004

Marshall Islands government raises "sin" taxes

10:20 am on 23 September 2004

The Marshall Islands is set to implement a major "sin" tax hike in an effort to maintain United States accreditation and funding for the College of the Marshall Islands.

The Marshall Islands parliament voted 26-1 this week to increase import taxes on beer and colas by 100 percent, with the measure expected to go into effect in October.

It also raised taxes on tobacco and other alcohol products.

The move by the parliament was a response to an ultimatum from the U.S.-based Western Association of Schools and Colleges (WASC) that the College of the Marshall Islands will lose its accreditation unless the government guarantees a major increase in funding for a new campus and expanded staff.

If the college loses its accreditation, it will also lose more than $4 million in U.S. federal funding that makes it possible for more than 90 percent of the college's students to go to school.

Also pending before the parliament is a bill to raise income tax that, if approved, will also benefit the college.